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Michigan Seeking To Limit Game, Film Development Tax Incentives

Michigan Seeking To Limit Game, Film Development Tax Incentives

February 18, 2011 | By Kyle Orland

February 18, 2011 | By Kyle Orland
More: Console/PC

A new budget proposed by Michigan governor Rick Snyder seeks to severely limit the amount of tax incentives available to game developers and other mass market entertainment companies operating in the state.

Under the proposed budget, existing tax rebates covering up to 42 percent of a film, TV or game production's tax expenditures would be limited to a $25 million annual cap across the state, severely limiting the number of projects that could be covered under the program.

Since the tax incentive program was first introduced in April 2008, over 130 projects have received over $648 million in total tax savings, a number the governor is seeking to reduce to make up for a $1.4 billion state budget gap.

Gov. Snyder pointed out that lower corporate tax rates across the board would help cushion the blow for entertainment companies.

Last November, a $2.7 million Ben Hogan-endorsed Wii golf game project from Pixofcator Entertainment became the first video game to qualify under the incentive program.

But Pixofactor's Sean Hurwitz says his company won't be the only one in the game industry affected if the changes go through.

"We recently had a visit from one of the top three largest video game publishers in the world, and they're looking to bring tens of millions of dollars' worth of business to us and to Michigan," Hurwitz told the AP. "There won't be any of that work without the incentive."

Snyder's budget must be approved by both chambers of the Michigan state house, where amendments could remove or alter the proposal before it becomes law.

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